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Credit: inditex

Inditex’s net sales climb 7.5% to €19.8 billion

Remarkable is the positive increase in the gross margin to 58.2% of sales, and the strong net cash position, up +17% to reach €7.7 billion, underpinned by strong operating performance.

  • Net profit increased by 12% to €2.72 billion.
  • The executive chairman, Pablo Isla, highlighted that the quarterly figures confirm the Company’s strategy and once again demonstrate the “solid growth being delivered by our integrated stores and online model, thanks to our focus on the highest -quality locations, store environments, products and customer experience both in stores and online. Crucially, this is coupled with strategic investments in technology and sustainability”.
  • The reach of the integrated platform of stores and online continued to expand. Zara launched online in South Africa, Ukraine, Philippines and Colombia; Massimo Dutti’s and Zara Home’s online platform went live in the United Arab Emirates, Saudi Arabia, Lebanon and Morocco; and Stradivarius, Oysho and Uterqüe launched their online platforms in the United States. In addition, all of the Group’s brands are now operating worldwide online stores, which reach more than 200 markets across the globe.
  • In October, the company marked the X Anniversary of the Framework Agreement between Inditex and UNI Global, a union federation for retail and distribution that represents more than 20 million workers. November saw the creation of the Global Union Committee between Inditex and IndustriALL, which represents more than 50 million global garment industry workers, building on the longstanding partnership between the two organisations.
  • The Group opened its first for&from store outside Spain, in Como (Italy).
  • Management estimates like-for-like sales growth of 4% – 6% in 2019.

Inditex Group’s net sales increased by 7.5% in the first nine months of 2019 –from 1 February to 31 October– to €19.82 billion, underpinned by growth across all brands and regions. Gross profit grew by 8%, reflecting a gross margin of 58.2% (+21bp).

The Group’s solid business performance had a direct effect on the bottom line —net profit increased by 12% year-on-year to €2.72 billion— and on strong cash flow generation; net cash marked a record high of €7.7 billion (up 17% year-on-year). The net profit figure includes the impact of the new lease accounting standard, IFRS 16, without which growth would have been 9%. Similarly, EBITDA, which registered reported growth of 45%, would have increased by 10%.

Inditex’s Executive Chairman, Pablo Isla, underlined that these figures confirm the strategy of the Company and highlighted “the excellent performance of the entire Inditex team, whose commitment is enabling the delivery of continued sustained growth in our integrated stores and online model”.

Pablo Isla also noted that the pace of growth is being maintained year after year “thanks to selected locations, store environments, products and customer experience of the highest quality, underpinned by a significant investment in technology and focus on leading and embracing the best sustainability practices”.

Management estimates like-for-like sales growth of 4%-6% in fiscal year 2019.

Lastly, the Board of Directors has agreed to appoint Anne Lange, as a Director. This appointement will be presented to the AGM for its ratification. Lange, a French citizen, is an entrepreneur with more than 25 years of experience in technology innovation.